An effort to consolidate various fraud related news from newspapers/websites across the world. News on Phishing, News on Skimming, News on Hacking, , News on Banking Frauds, News on Identity theft, Fraud news

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Sunday, November 9, 2008

Real-life internet scammers dissected -

feature In 1840, more than a century before the internet was invented, an enterprising gentleman named Mick Bell convinced a Mr Monies to hand over cash and clothes to help smuggle what Monies thought would be £20,000 worth of goods out of Sydney's Port Hacking dockyards.

Not surprisingly, that ship, like today's million-dollar lotteries and unclaimed bank accounts, never existed. Yet 168 years later, various forms of the same ruse are hooking more people than ever - including thousands of Australians each month.

So-called Nigerian 419 scams, referred to by law enforcement agencies as "advanced fee fraud", work on a simple proposition: the victim is persuaded to advance a relatively small sum of money to the scammer in the hope of eventually receiving a fortune.

The goal of scammers varies from finding drug runners or "money mules" to simple theft, with some cases dragging on for years. However the common element is that advanced fee fraud targets any weakness in a person's character whether it be greed, gullibility or in the case of those who fall for scams involving fake Russian brides, loneliness.

Australians send around $36 million to Nigerian scammers each year, according to operations commander of Queensland Police's fraud and corporate crimes group, Brian Hay, who points out that Nigeria is not the only destination for swindled Australian money.

"This only looks at money received within Nigeria," he says. "We're currently conducting research to indicate a more accurate cost to Australia."

The scam's success has seen it replicated in Liberia, Spain, and Italy, says Hay, who describes Nigeria's advance fee fraud industry as "a global enterprise" rather than a backyard operation.

The problem is so large that murders have resulted after some victims have attempted to salvage lost money. Between 1992 and 1999 17 people — mostly Americans - were killed attempting to reclaim stolen cash, according to research by the Australian Institute of Criminology.

On the flip side of the fence, vigilante groups have also emerged to take on scammers head to head. Calling their efforts "scambaiting", vigilantes typically set up fake email accounts in order to attract scammers, with the aim of wasting their time, extracting money from them, or more recently, capturing them on video in compromising positions.

Web sites such as US-based 419 Eater and UK-based Bait a Mugu provide detailed advice on how to catch so-called "419ers". 419 Eater has hosted videos of prized 419 catches. One such video, which has since been taken down, showed two, presumably Nigerian, men head-butting each other in what they believed was a casting scenario for a role in an upcoming action movie.

But anger over the scam has come from both sides of the fence. Responding to renewed interest in such scams' impact on Australians, Nigerian diplomat Sunday Olu Agbi recently told The Sydney Morning Herald that people who sent their money to scammers were "as guilty" as the scammers themselves.

Agbi's comments highlight the problem for law enforcement agencies around the globe. Besides cross-jurisdictional obstacles faced by police, victims are often unwilling to tell authorities their story for fear they have already undertaken something illegal.

Those victims are the ones that get strung along for years, according to Hay.

"What happens is that their name and contact details will go on a suckers list which is traded amongst different groups," he says. "I looked at one example the other day where a gentleman and his family had lost $2.5 million from a scam that started 10 years ago."

"It ended up involving friends and family, but they reckoned that when the story had evolved, they had actually been hit by at least half a dozen different scams along the way," he says.

However Hay said this type of victim did not represent the majority.

"One of the sad things is that one of the biggest groups to take up the scam is seniors. They're often the most financial, they have the most to lose and seniors are really novices when it comes to the online environment. They are usually trusting people," he says.

"Often when people go online, they're denied all sensory perception that form our ancillary defences, so their senses are completely disabled."

Romantic trap Deep, open pockets have also been found in the lonely hearted, an emerging group of victims targeted by scams originating in Eastern Europe or Russia.

Earlier this year Queensland police warned of rapid growth in fraud that used Russian brides and dating Web sites to con victims into becoming money launderers and drug mules.

In an evolution of the Nigerian scam, criminals prey on people registered with dating sites, according to Hay.

"We see a great deal of energy being placed into victimising online dating processes. Not only could [victims] lose their savings, assets and possessions, they lose their self-esteem, get a broken heart and sometimes require medication," he says.

"In addition to that, we know that romance scam victims have been set up to become mules to transport heroin into Australia," Hay said during a special presentation at the AusCERT 2008 security conference earlier this year.

Graham Ingram, general manager of AusCERT, explains that victims have been fooled into laundering money because they believe they are doing a favour for someone they think is a prospective partner, who they met on a dating Web site.

"We have seen cases where the Russian bride has a friend in Melbourne or WA and her friend wants the bride to come over to visit, and is willing to pay for the bride's ticket - but her friend can't transfer the money directly to Russia," said Ingram.

Ingram says that the Russian bride would then ask if the victim would mind if her Australian friend transferred a sizable amount of money into the victim's account. The victim would then transfer the cash to the Russian bride's account so she could buy her ticket to visit.

"People say, 'it can't be a fraud because they are not asking for my money', where in actual fact they are moving money from banking scams," added Ingram.

It's clear that despite increasing awareness of the number and variety of advanced fee fraud scams out there, Australians are still falling for them.

On the next page: Two audio recordings of conversations with real-life scammers.

My dead uncle and a Spanish 419er Email and the internet have become synonymous with 419 scams, but fraudsters still rely on old methods to reach victims. A ZDNet.com.au reader in Sydney received such a letter that had been date-stamped by Spain's postal service in Valencia on 4 August 2008.

The letter was a reminder of the 1990's when Australia's postal system had come under heavy assault from advance fee fraud letter senders, which mostly used fake stamps to reach victims. During a three-month period in 1998 Australia Post intercepted 4.5 tonnes or 1.8 million letters that arrived with fake stamps, according to the Australian Institute of Criminology.

The letter, seen by ZDNet.com.au, purported to have been sent by Spanish attorney Esteban P. Marcel, who claimed to have tracked down the last living relative of his deceased client, who had left an estate worth €2.75 million; supposedly the dead client and the would-be victim shared the same surname.

"The bank has issued me a notice to contact the next of kin," Marcel wrote, "or the account will be declared unserviceable and the fund diverted to the bank treasury."

ZDNet.com.au contacted Marcel using the Spanish contact telephone number on the letter. To proceed, Marcel first asked us to quote the reference number on the letter, which we did.

"Alright, thank you very much," said Marcel politely. "First of all, I must say many thanks for your patience and your call."

If we cooperated with Marcel, he said, we would evenly share 80 per cent of the €2.75 million, while 20 per cent would be "shared among charity organisations".

"Right, so that is why I have sent you this letter," Marcel said, "because if the fund is declared not serviceable, it means the funds now belong to the government. It's a kind of an unclaimed fund," he reassured us.

Marcel wanted our phone and fax details which he said would be used to present an official application to the bank. The bank, he said, would contact us later that day.

"And when they [the bank] contact you they will require some documents from you. And your duty is to let me know if the bank contacts you — you have to let me know what the bank said and the kind of documents they require from you," said Marcel.

After being prodded about what documents would be required to submit, Marcel said we would need to provide an "exchange of ownership certificate" which, it turned out, we wouldn't need anyway.

"Any document that they demand from you, just let me know, and I will make it up here and I will get it to them. So I, ah, ah, they might call you ... After you talk to them, just give me a call and let me know what they said."

We were also assured that by cooperating we would not be engaging in anything illegal.

"I am a family of five. I have four kids. If this was a project I knew that I couldn't accomplish, I wouldn't try it. I respect myself as an attorney and I know the law. And I know what I would do to make things legal before the eyes of the government and before the eyes of the government of Australia," the alleged scammer said.

And how did Marcel find the mailing address of M. Smith, whose home address had not been listed in the phone directory? "Oh, I found it through the Australian business directory," he said.

In this recording by security firm MessageLabs' researcher Mark Sunner, would-be victim "Alistair Ben" has responded to an email from a person claiming to be Pepsi's promotions manager, who advised him he had won €1.5 million from Pepsi's annual award.

Alistair Ben was asked to give his name and quote a reference number, which rather than being used to authenticate the caller, was likely used to identify the sender. The promotions manager who answered the call claimed to be Pepsi promotions manager, Michael McAllister.

After the confirmation process McAllister warned Ben: "Please be informed that all winners of this promotion are liable to pay for the cheques to have this delivered to their location," said McAllister.

"How much is that?" asked Ben.

With some uncertainty, McAllister said it would be around €300. "How do I pay that?" asked Ben.

"When you contact the Universal Experts [courier], they are going to tell you how to pay it. If you give me a call in the next 15 to 20 minutes, I can tell you what to do, and exactly how much to pay," said McAllister.

When Ben called back, McAllister confirmed the total charge for the courier would be £221 to be paid via Western Union to a "Kenneth Peterson" of 151 Canada Sq, Canary Wharf, London E145DY.

Nearing the end of the conversation, McAllister took the opportunity move to the next stage of the scam by obtaining the caller's home address.

"Just try to make the payment at Western Union today. Do not forget to send me your complete mailing address," he told Ben.